Google Fast Flip may not be great for media

MEDIA Publications still wouldn't have customer data

Published 4:00 am, Sunday, September 27, 2009

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Google Inc. recently unveiled several initiatives that it says will help struggling publishers make more money online, employing its technologies to befriend an industry that, in many corners, sees the search giant as a foe.

Few, however, view the moves as a panacea for what ails the media sector, and some believe they could actually pose new threats.

This month, the Mountain View company introduced Fast Flip, an online news hub that allows readers to quickly browse news articles online in a method akin to flipping the pages of a magazine. Google is offering participating publishers a cut of the surrounding ad revenue, something it has rarely done previously with content providers.

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Separately, the company told the Newspaper Association of America that a new version of its Checkout micropayment platform could help the industry charge for online content.

Most recently, Google rolled out DoubleClick Ad Exchange, a real-time auction for Internet display ads that it claims will boost the number of advertisers available to publishers.

Many in the media, however, view these as merely incremental improvements or interesting experiments.

"I don't necessarily see it as a game changer," said Randy Bennett, senior vice president of business development for the Arlington, Va., newspaper trade group. "I don't know that anyone views Google as the potential salvation of the newspaper industry."

Indeed, some view it as quite the opposite. Many in the publishing world grumble that Google and other aggregators are fleecing their pockets by keeping the lion's share of advertising revenue they generate compiling and linking to articles.

Google maintains that displaying headlines and story snippets is fair use and, moreover, drives enormous amounts of traffic to news sites.

"We don't believe at all that we undermine their efforts," said Chris Gaither, a spokesman for Google News. "We believe we help consumers find the news they're looking for and we provide tools for news publishers to help make more money on the traffic that they do get."

The latest initiatives reflect the company's belief that it can act as technology partner for the industry, helping it secure larger audiences and greater revenue online, he said.

Checkout

Alan Mutter, a media consultant and former Chronicle editor, said that Google's Checkout micropayment system and a similar platform being developed by Journalism Online, a venture backed by media entrepreneur Steven Brill, offer ready-made solutions for charging and tracking information about online readers.

But there are downsides to outsourcing this critical piece of the business: Forgoing a chunk of precious revenue to a third party and the inability to own customer data, which enables the targeting of ads.

"Detailed, granular data is going to be the Holy Grail," he said. "Newspapers will not be able to survive selling far-reaching but undifferentiated advertising into the future."

There remains the bigger question, of course, of whether readers will be willing to pay for online news, having grown satiated on a generous diet of free content for years.

"Many of the interesting stories appear in several media, so why should someone pay even a small amount?" said Jim Chisholm, a consultant with iMedia Advisory Services.

Fast Flip

It's also far from clear whether the Fast Flip experiment will prove to be a knockout success like Gmail, or another in the line of Google flubs like Print Ads, a short-lived service selling ads for paper and ink publications.

The upside for readers is that they don't have to click through to view more than a snippet of an article. The beauty for the roughly three dozen major publishers partnering with Flip is that they get to keep a slice of the ad revenue earned on the site. The trade-off is they won't necessarily get the traffic.

"Any news publisher today can't simply sit back and say, 'I have a Web site and hope everyone comes to me,' " he said. "You have to take advantage of all the different technologies and ecosystems out there from social media to new platforms like Kindle to get your content where the audience wants to consume it."

But should it become popular with consumers and generate substantial revenue for publishers, it would raise another issue: Whether Google has too much control over online media, allowing it to tip the market in favor of companies with which it chooses to share revenue.

The company has already struck licensing deals allowing it to host content from the Associated Press and other major news wires, while freely linking to many newspapers.

"There is a big question here, no matter how good a company they are technologically, no matter how well meaning they are, are they just too damn dominant in deciding the winners and losers?" said Ken Doctor, affiliate media analyst with Outsell Inc.

DoubleClick

The DoubleClick Ad Exchange details are still somewhat unclear, but Doctor said this news is potentially the most promising development for media.

For years, publishers were content with the traffic that Google and other aggregators sent their way, because they believed that "eyeballs" was the name of the online marketing game.

But, as Mutter noted, targeting ads to users based on their online behavior is the trick for which marketers pay real fees. Google has excelled at this by linking search queries to relevant text ads and already provides this technology to publishers through the AdSense product.

DoubleClick promises a similar advantage for the even more lucrative display ads, which include text and graphics such as the banners across the top of Web pages, Doctor said.

"Advertising is still going to be the main growth area of newspapers in the digital world," he said. "When you combine the impact of advertising campaigns that can be in part display and branded advertising, that multiplies the power."

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